The Anfield side enjoyed Christmas Day on top of the table after a superb start to the campaign under boss Brendan Rodgers.
Their form over the first half of the season has unexpectedly seen them touted as possible title contenders, although Gerrard insists that qualifying for the UEFA Champions League remains their top prioirity.
After four years away from the top table of European football, the England midfielder knows just how vital it is for their continued progression to reclaim their place in the continent's premier club competition.
"I think if we were to finish outside the top four I think it would be a disappointing season," he told Sky Sports News ahead of the trip to Manchester City on Thursday.
"With the talent we've got in the squad and the way we've started, we've set ourselves up with a magnificent chance of finishing in the top four so if we were to let that slip and finish outside everyone would be disappointed.
"The key to us is to finish inside the top four, it helps the club financially to bring players in and to end that long spell without it.
"I think we're title contenders if we're in the title race with 10 games to go - I don't get carried away or change targets or raise expectations around the city just because we've started the season very strong.
"To be in the title race you've got to be there with 10 games to go with a realistic challenge of winning it.
"I do have confidence and belief in my team-mates that we're capable of surprising a few people this season."
